MannKind Corporation (NASDAQ:MNKD) shares have been down recently owing to the FDA’s decision to extend the PDUFA date for Afrezza to July 15, 2014. A report from Brinson Patrick on April 8, 2014 by analyst Christopher S James views the recent weakness as a good buying opportunity believing the new drug has “a high level of conviction for approval.”

MannKind

Votes, recommendations in favor of MannKind

Afrezza won the approval for type-1 and type-2 diabetes from AdCom by 13 – 1 and 14 – 0 votes, respectively. Such recommendations are no surety that the FDA will also approve the drug, but the analyst has “a high level of conviction for approval.”

The analyst considers the votes and recommendations as a best-case-scenario for Afrezza, and expects a significant announcement related to a partnership soon.

On the basis of a unanimous vote and discussions regarding type-2 diabetes, the analyst believes that Afrezza’s benefit-risk profile has improved, and a high potential adoption rate is expected. The follow-up discussion presented a positive environment for the drug, including the “pulmonary risks that appear manageable with serial PFT,” believes the analyst. Also, concerns regarding carcinogenicity are expected to be addressed in the post-marketing setting.

Initial sales to be strong for Afrezza

There have been fears that the subgroup discussion might result in a marginally narrower label. According to the analyst, this would not have much effect on the revenue projections given by MannKind Corporation (NASDAQ:MNKD), which are based on the “pent up demand for Afrezza.” Investors must note that these discussions are only recommendations from the panel, and in no way represent a “designed subgroup analysis.” Analysts do believe that the label might not include reduced hypoglycemia, but patients and physicians would surely view Afrezza as a better option than the SQ rapid acting insulin (RAA).

Even though the FDA has extended the PDUFA approval, analyst expects the drug to get the approval eventually. Post approval, investor focus will shift to other processes including labeling, commercial partnership, and successful launch. Sales for Afrezza are expected to start from the first quarter next year, and analyst model the 2025 Afrezza sales to be $3.6 billion, “driven by use in earlier-stage T2D.”

Initial demand of the drug from MannKind is expected to be strong “considering statements made by the panel and open public hearing about its efficacy, safety, pharmacokinetics, and attractive size.”

The Brinson Patrick analyst has a Market Outperform rating on MannKind Corporation (NASDAQ:MNKD) with a price target of $12.